But the big payday would be a role in recasting whole film libraries in 3-D

How 2-D to 3-D works

The classic Harold Lloyd movie “Safety Last!” was originally filmed in 1923 in 2-
D black and white. Legend3D of San Diego converted it into a 3-D color movie for
today’s audiences, part of the its growing conversion business.

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The classic Harold Lloyd movie “Safety Last!” was originally filmed in 1923 in 2-
D black and white. Legend3D of San Diego converted it into a 3-D color movie for
today’s audiences, part of the its growing conversion business.

In a theater room at Legend3D’s San Diego office, Barry Sandrew watches a clip from Tim Burton’s “Alice in Wonderland,” a visually stylish, 3-D retelling of the classic story that was released last year.

Legend3D converted about 22 minutes of the film from 2-D, which was how certain scenes were created, to 3-D using complicated imaging technology.

“We converted the Wonderland part, because frankly it was too cumbersome” to create in 3-D from the outset, said Sandrew, founder and chief operating officer of Legend3D.

The company is one of a plethora of film conversion firms popping up in Southern California and elsewhere. For now, much of their work centers on converting certain scenes in first-run theatrical 3-D movies, such as “Alice In Wonderland,” that were created in 2-D because the scene was too hard or too expensive to shoot with 3-D cameras.

The holy grail for Legend3D and other conversion firms, however, is transforming the huge Hollywood studio libraries of 2-D films — imagine the “Harry Potter,” “Star Wars” and “Lord of the Rings” collections — in 3-D.

That hasn’t happened yet to a large degree. But 3-D supporters say a lack of content is one of the key bottlenecks holding back 3-D adoption — particularly for 3-D TVs. So they think it’s only a matter of time before these libraries begin to be converted.

Only 35 movies are slated for release in theaters this year in 3-D. While that’s an increase from 25 films in 2010, it won’t come close to meeting demand as more households acquire 3-D capable televisions, say analysts.

Legend3D is already benefiting from the recent revival of 3-D. When it began work on “Alice in Wonderland,” it had 40 employees in San Diego and about 120 in India. Today, it has about 400 in San Diego and 825 in India. It expects to hire more, said Sandrew.

“We have all these people because we’re doing five movies at once,” said Sandrew. “It’s a very creative process. The technology semi-automates the process, but there has to be a creative person there watching over it and doing it.”

Sandrew won’t name the five films Legend3D is currently working on, citing confidentiality agreements with Hollywood studios.

Conversion has a mixed reputation, mostly because of “Clash of the Titans.” Warner rushed to convert the film, which was never intended to be in 3-D, in hopes of cashing in on the momentum created by the box office 3-D blockbuster “Avatar.”

The result fell far short of what moviegoers expected.

“It was a rush job, a seven-week turnaround,” said James Marsh, an entertainment industry analyst with Piper Jaffray in New York. “I was at the premiere of that, and I thought the 3-D quality was not very good.”

Industry analysts say the lack of time given to the conversion companies, rather than the conversion process itself, was the problem for “Clash of the Titans.” Legend3D did not work on the film.

“I think the quality of conversion (overall) is much better than what the general perception is,” Marsh added. “Most people would not be able to tell the difference” between a movie that was converted versus one shot with 3-D cameras.

Sandrew, who has a doctorate, honed his imaging expertise as a neuroscientist at Harvard, where he worked on colorization and 3-D imaging of CAT scans.

His work got the attention of a group of entrepreneurs looking for technology to apply color to old movies. They lured Sandrew to American Film Technologies in 1986. The company was hired by Ted Turner to colorize hundreds of MGM films. Sandrew left the company after about five years for Lightspan, an educational software firm that was eventually sold. After that, he started Legend Films in San Diego, which got him back in the colorization business. Legend Films worked on 135 titles over the years, including “It’s a Wonderful Life” and “Holiday Inn.”

About five years ago, Sandrew saw the wave of 3-D coming and began revamping Legend Film’s colorization technology toward conversion.

“We know how to take a movie apart, put color onto it, and put it back together,” he said. “We’ve been doing that for years, and at least 65 percent of the process of converting 2-D to 3-D is the same as converting black-and-white to color.”

Hence Legend Films became Legend3D. The company raised $5 million in a preferred stock offering to move ahead with the transition from colorization to 3-D conversion. Venture capital backers include Par Investment Partners in Boston and Augustus Ventures, a European fund.

It converted commercials and did some work on a Michael Jackson Tour video before teaming up with Sony Imageworks to convert parts of “Alice in Wonderland.”

After that, Legend3D received a contract to convert the first three “Shrek” movies into 3-D, which is now completed. It also converted about 30 minutes of “The Green Hornet,” a Sony Pictures release that is in theaters now.

“The only thing that is going to make 3-D truly ubiquitous is 2-D to 3-D conversion because we have all these catalog titles we can convert,” said Sandrew. “Studios are going to make a fortune in 3-D. Anyone who saw “Titanic” in 2-D is going to go out and buy another copy of it to see in 3-D.”

For their part, Hollywood studios have been taking a measured approach to converting old titles in the near term, say analysts. “Titanic” is rumored to be set for a 3-D rerelease in theaters in 2012, but there are no firm plans. Warner Bros. decided not to rush to convert the “Harry Potter” series into 3-D, said Nick Dager, editor and publisher of Digital Cinema Report.

“Prior to Harry Potter, the studios seemed hellbent to convert even “Gilligan’s Island” to 3-D to generate revenue,” said Dager. “There was enough push back from the consumer so that seems to have calmed down. I think Warner’s decision not to convert Harry Potter too quickly was a brilliant one.”

Dager had been skeptical about 3-D conversion. “There are conversion companies sprouting up like dandelions,” he said. “Given how much bad conversion there has been, I was probably against the whole idea.”

But last year he saw the results of Legend3D’s conversion and came away impressed. “I believe they are one of the best, if not the best, in the space,” he said.

Adding 3-D to a movie can cost an additional $10 million to $15 million, said Marsh, the Piper Jaffray analyst. Most movies in studio libraries were not shot with 3-D in mind, which could make conversion more difficult and expensive.

“My sense is there’s a limited number of genres and a limited number of films that people care about seeing in 3-D,” he said. “People don’t want to see “The Big Lebowski” in 3-D. “Star Wars” — that’s got potential.”

Marsh sees a role for conversion as the 3-D industry grows and more homes have 3-D-capable sets.

“You can’t just wait around for all the movies going forward to be shot in 3-D,” he said. “You’re going to need postproduction conversion. It is going to have a critical role in the home experience.”

Sandrew thinks that bodes well for Legend3D. He expects to hire another 150 workers in San Diego and 300 more in India in the coming year.

“We’re turning away business right now, which is something we don’t want to do,” he said. “We’re ramping up. But if we were to double our size, I still think we’ll be at full capacity because once these catalog titles start to click in, it’s going to be unstoppable.”